10/27/2025

There’s a Reason Electricity Prices Are Rising

It’s not data centers or AI

Over the past few months, Americans have looked aghast at their rising electricity bills — in New Jersey, for example, prices have risen 19 percent just in the last year — and found one clear scapegoat: data centers. As these energy-sucking operations proliferate, the thinking goes, they require more and more electricity, pushing prices up for everyone from big companies to small households.

The argument has become a political flash point. In Virginia, the Democratic candidate for governor, Abigail Spanberger, has said she will push data centers "to pay their own way and their fair share." Last week, Senator Josh Hawley (R-MO) wrote on X: “These data centers are massive electricity hogs... Somebody has to pay for it all — and don't believe any politician who says it won't ultimately be you."

However, a new study from researchers at Lawrence Berkeley National Laboratory and the consulting group Brattle suggests that, counterintuitively, more electricity demand can actually lower prices. Between 2019 and 2024, the researchers calculated, states with spikes in electricity demand saw lower prices overall. Instead, they found that the biggest factors behind rising rates were the cost of poles, wires and other electrical equipment — as well as the cost of safeguarding that infrastructure against future disasters.

Please select this link to read the complete article from The Washington Post.